In this week’s commentary I outlined a strategy for shorting JNK by using out-of-the-money put calendar spreads. Although the example I used involved spreading January 35 puts that expire on the 17th day of the month against October 35 puts that expire on the 18th day of the month, we’ll look to refine the strategy in the chat room in real time. There is no great urgency about getting aboard, since this vehicle has been screwing the pooch for years. However, once we initiate the position, we’ll roll it forward using monthly (or perhaps weekly) puts similarly to the way described in the commentary. At some point during the week, I’ll also hold an online session to discuss the trade in greater detail. Stay tuned to the chat room for further details. You can receive timely email notifications of these sessions by checking the appropriate box on your ‘My Account’ page. ______ UPDATE (9:10 p.m.): I held a short webinar yesterday to explain in detail how to initiate the spread described above. Nearly 50 subscribers attended, and I would encourage all of you to put your new knowledge to work at your own pace. To repeat: There is no urgency, even if the junk bond market has come in for some selling lately. If you missed the presentation, I made a recording of it that will be available to all subscribers by no later than mid-day Wednesday. Meanwhile, anyone who fills an order using my strategy should let me know in the chat room so that I can establish a tracking position for your further guidance. I would encourage all to crowd-source the opportunity by comparing notes in the chat room. _______ UPDATE (October 9, 1:12 a.m.): In response to a question asked during yesterday’s TLT workshop, I suggested a starter position in this vehicle just to get our feet wet: buy 16 Jan 20 38 puts at the next rally target achieved. It lies at 40.49 (see inset, a new chart), and our goal will be to short January 20 36 puts against them for the same price if the stock pulls back from the target as expected.
